Byline by M J Akbar :The World is Round
The Congress theory of political success in the next election consists of simple arithmetic. Rural sops will bring the rural vote. The nuclear deal will bring in the urban vote. The massage of promises and words will retain the Muslim vote.
If Dr Manmohan Singh loses the next general election — predicted for October by the knowledgeable — he will know whom to blame: his best new friend George Bush. Bush has achieved something unique. He has globalised defeat.
The reasons and means vary. In Britain Tony Blair may be eased out and in Australia John Howard may be driven out, but the word in common is "out". Bush crippled himself long before time made him a lame duck. He began to cripple his friends at the height of his power, and the curse continues in the twilight of his term.
Prime Minister Manmohan Singh escaped the swamps of Iraq, but he could become the victim of one bilateral Bush initiative, the potential nuclear deal with India, and the huge, chaotic mismanagement of the economy that has compounded the gushing fiscal wounds of the Iraq-Afghanistan war. Bush has financed this colossal misadventure with IOUs on history and debt from the world economy, setting off a sinful (as opposed to virtuous) cycle.
Debt and war have destroyed perpetrator and victim alike in the past. They are doing so again. Bush's wars cost $33.8 billion in 2002; they have ballooned to $171 billion by 2007. Joseph Stiglitz, winner of the Nobel for Economics, has estimated that the cost of the Bush wars could cross three trillion dollars by 2017, that is, in another ten years. Go figure, as they say in America. Where has the money come from? Debt.
Debt has helped weaken the dollar. Producers who sell oil in dollars, seeking to keep their income constant in real terms, and oil companies who profit in whichever direction the wheel spins, have kept raising the price of oil. A spiral effect has driven prices into the stratosphere. Oil was $23 a barrel when the Iraq war began; it is over $110 now. The pressure of prices has induced an impassioned chorus for alternative energy. Bush decided to subsidize the production of ethanol to produce this alternative energy. American farmers switched from food-for-the-stomach to crops-for-cash. There is now a critical shortage of wheat and rice around the world. The temptation of cash and higher prices impact on the pattern of agriculture. Cash crops replace staple crops. The prices of basic edibles join the spiral. India is now on the cusp of inflationary pressures that could go ballistic, even as the government has no solution in mind except a series of sops that will be throwing a bucket of water into a desert. Prices of basic food and oil in the Indian bazaar are rising at a dramatic pace. For the poor, this is a kick where it hurts most, in the stomach. Their pain will be reflected in the vote in the next general elections.
This too is globalization, a chain of sequence and consequence that is linked across the world.
The managers of 'globalization', a vast and varied array of vested interests that may not necessarily be in harmony on some issues but always closes rank to protect its core interest, take care to cohere globalization to good news. It is a brand that needs protection in order to get promotion. Bad news, even when it becomes a worldwide epidemic from a single virus, is never called globalization. No one uses the term when the New York Stock Exchange sneezes and Mumbai catches a cold. This would tarnish the image of globalization as the panacea in a post-Marxist age, a libertarian answer to socialism's impenetrable dogma. Very few — although Stiglitz is famously among the few — wonder about the tipping point, when the liberty of this philosophy morphs into license into virtually printing money.
One reason — of course, not the only one — why share markets today are as flat as the globalize world is because the meaning of capital has changed, shifting in the process the original goalposts of capitalism. Capital was the means necessary for the production of goods and services that could be sold for a profit, creating jobs and higher-standard lifestyles. Profit, of course, has always been an elastic word, stretching as far as the market will bear. Hence, marketing became a tool by which a need was enhanced into an illusion in order to raise prices and maximize profits. Thus soap, a need for the elimination of dirt, was elevated into a magic wand that would make you into a film star. Perfume is no longer a discreet veil over body odour, but a sex accessory. A handbag is no longer a convenience; it is a photograph of your bank statement. A watch no longer merely tells the time; it is a status symbol. But all this is acceptable because, at the core, there is a product, created out of capital.
But we have now moved into share markets and a world economy where there is illusion without a base, and value is attached to a fiction; and when the principal purpose of money is not to add to the quantum of goods and services but merely to make more paper or plastic money. The Sensex keeps rising in increasingly thin air, crossing peaks that are not made of rock but are arbitrary niches in the financial ozone layer. Even in the best of times, turbulence in the American economy, by far the most powerful, would have sent shudders. But connectivity now honed to marginal shifts in value, a sub-prime crisis in America wipes out ban profits in India. There is little insulation.
The Congress theory of political success in the next election consists of simple arithmetic. Rural sops will bring the rural vote. The nuclear deal will bring in the urban vote. The massage of promises and words will retain the Muslim vote. Hallelujah! We are all in power for five more years. The arithmetic could get disjointed by algebra. Prices cross the rural-urban divide, leaving anger in their wake. The minorities have heard the talk, and got nothing substantive; while Muslims are angry at the alliance with Bush which makes India a possible ally in Bush's wars against Muslim nations.
The most consistent fact of democracy is its ability to surprise governments who think they have won elections before the votes have been counted. This happened with the last national government in Delhi. The BJP has still not psychologically recovered from the shock that told the party that India was not shining as luminously as it thought. If the Congress does not watch out, it could face some shock therapy soon.